IO Interactive Faces Layoffs as Project Fantasy Partner Departs

The Danish studio announced a split with an external partner, leading to imminent staffing changes.

Jun 30, 2026
Industry & Business
IO Interactive Faces Layoffs as Project Fantasy Partner Departs

IO Interactive, the development studio behind the Hitman series and 007 First Light, is set to implement layoffs following the dissolution of its relationship with an external partner for its unrevealed game, Project Fantasy. The studio confirmed the news in a public statement, noting that the split necessitates adaptation to a new reality with short-term consequences, including staffing decisions.

While the specifics of the partner were not disclosed, speculation suggests it could be Xbox Game Studios, as documents from a 2023 legal battle between Microsoft and the US Federal Trade Commission indicated that Xbox was slated to publish Project Fantasy. This potential partnership change comes at a time when Xbox is reportedly undergoing significant internal restructuring.

Despite the impending workforce adjustments, IO Interactive has affirmed its commitment to Project Fantasy. The studio stated that the game, its world, and its intellectual property are deeply valued and that it will still be released. Details about Project Fantasy remain scarce since its 2023 announcement, with the only confirmed information being that it is an online experience.

The news follows a period of positive reception for IO Interactive's recent Bond title, 007 First Light. The studio expressed gratitude for the community's response to its take on the iconic character. The full impact of the partner's departure on the development timeline and scale of Project Fantasy remains to be seen.

Sources